Elements Contract Business Situations | Standard Contract Elements

Apply the elements of contract in given business scenarios

Elements Contract Business Situations is found that the company posting the advertisement for the sale of second hand airbus is the East End Airways. The Airbus 320 is subject to be sold for the cost of 12.5 million pounds. The same is regarded as an invitation to offer and not an offer itself. Furthermore, the CEO of West Aviation Ltd. approaches the Managing Director of the Elements Contract Business Situations | Standard Contract Elementsselling company to hold the airbus for five more days as he is interested in purchasing the same but would be unable to do so as he is away on a business trip. The MD expresses his inability to do so as he would have to sell it off to the buyer who may offer the price in the meanwhile. Thereby, the CEO offers to pay 100,000 pounds for holding the airbus and not selling it to any other party for the next five days, i.e., until his business trip ends. [Meyer (2010)]. It is noted that the contract is a valid contract for having the basic elements of the contract such as the offer that was made by the CEO, the acceptance made by the MD, the consideration for 100,000 pounds and the legal capacity to contract. Under the case of Thornton v Shoe Lane Parking [1971] 2 WLR 585 Court of Appeal, it was observed that the acceptance not only is gathered from verbal communication but also from an action or a performance of an act in order to communicate the acceptance. Thereby, the acceptance may be regarded as the act of not selling the airbus for the next five days until the party returns. [Cooke (2007)]

Apply the law on terms in different contracts

According to the facts of the case, it is observed that Mr. Peters was keen on participating in a bicycle contest for which he wanted to get his bicycle repaired from the shop. Therefore, the shop and Mr. Peters decided to enter in to a contract for the repairs of the bicycle. The terms of the contract were detailed and agreed to. To repair the bike is considered to be an express term and a condition. Similarly the maintenance of the bike in the same condition is an implied term. The warranty is that the bike would be repaired according to the standards as expected from the services so provided by the shop. The term of not being responsible for the bike is an exclusion clause. The same was presented as written in a signboard behind the counter that was hidden by the bike that was hanging from the wall.
Furthermore, when Mr. Peters had approached the shop to collect the bike, it was found that the bike got misplaced and was not repaired accordingly. Thereby, Mr. Peters has the right to claim the damages for not complying with the condition of the contract that is the repair of the bike for the purpose of using the same in the bike race. The breach of the condition entitles him to void the contract and claim for the damages for not being able to participate in the race.Therefore, Mr. Peter can claim damages as the exclusion clauses were placed after the contract was entered into and thereby were not part of the contract Thornton v Shoelane Parking. Mr. Peters would have a strong claim according to the provisions of the Unfair Contract Terms Act for having entered into unfair terms after the contract had already been entered into. [Pratt (2000)]

Elements Contract Business Situations | Standard Contract Elements

As presented in the case study, the two companies had a contract of purchasing 30 cars in number on the condition that the same are immediately functional on the roads of UK. The same term is considered an innominate term for the following scenarios:

  1. If the situation arises whereby the parts used for the manufacturing of car are considered to be illegal and no change can rectify the same, then the term would be considered as a condition. This is so because the cars would be rendered as dysfunctional ab initio.
  2. The situation whereby the repair is required which would take minimum amount of time per car then such term may be regarded as a warranty. This is because the car would be still valid to function with minimum changes. [Collins (2008)]
  3. The situation whereby the repair time per car requires to be 3 months, then the term would be considered as an innominate term depending on the breach in a particular case.

Under the case of Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 the innominate term approach was established that clarified the state of the term as neither a condition or a warranty only to be decided after studying the effect of breach on the entire contract at hand. The status of the contract shall be restored after complying to the effect.   The breach shall be judged on the substantiality and the party being affected from the breach so caused. The same may be effective under a contract but not as much in another contract.Order Now